How to Start a Limited Liability Company: A Walter Morales Guide
Starting an LLC is a perfect way to limit your liability for company debts. According to Walter Morales Baton Rouge, small businesses set up limited liability companies. It’s because of the liability protection they give. It’s also because an LLC is a different entity from its owners. The owners aren’t personally responsible for the business debts. LLCs are more flexible and easier to set up than corporations.
To build an LLC, you need to do some legal paperwork with the administration. The rules are unique to specific states, but some basic steps are the same despite your location.
Choosing a name
Two separate businesses can’t share a name even if they are in different states. You can’t use certain words in many states in a business name like “bank.” It’s good to search for a unique name and whether it’s available. Check this with your state before you do any LLC paperwork. Having a unique name avoids confusion and trademark infringement claims.
After successfully selecting a unique name, fill in your LLC documents right away. It helps you to reserve the name. You will have to reserve the name by paying the reservation fee and filling forms. All states have their standings on reservation period, renewal policies, and filing fees.
Choose a registered agent.
Some states will need you to have a statutory agent, a registered agent. A statutory agent is a registered person who agrees to get lawsuits subpoenas and all official documents on behalf of the LLC. The person then delivers them to an appropriate person in the LLC.
Many states will accept a person aged 18 years and above, including an officer or member of the LLC. Some companies offer registered agent services at a cost.
Make an LLC operating agreement.
An operating agreement shows a roadmap of how an LLC will run. It reveals the following:
· Ownership agreements
· Member voting rights
· How to divide losses and profits
· How to hold meetings
· How to hold meetings
· How to govern the business
· The rights of members if a member dies
· How to dissolve the business
Though the state laws may not need this agreement, it’s an important document. It defines the business rights and responsibilities to reduce future conflicts.
File the organizational paperwork with the state
Every state has its procedure for establishing an LLC. The person forming the LLC or a registered agent must sign the paperwork. The filing fee is different between states.
Get a certificate from the state
After submitting all the paperwork, the state will issue a certificate. The certificate will enable the acquisition of a business license, a tax ID number, and a bank account.
Register the business in other states
If you intend to operate your LLC in different states, you must register the company in those states. You will go through the same paperwork you did in the formation stage. Your business will need a registered agent in all the states it will operate.
An LLC is a flexible and popular business option that works well for small startups. Do the paperwork well and have an operating agreement.